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Pakistan opportunity for Belford Dolphin

Vol 7, PW 14 (24 Sep 03) Exploration & Production

ONGC's likely delay in setting a date for Belford Dolphin to spud its first deepwater well offshore Kutch could turn into a business opportunity for rig owner Dolphin Drilling in the deep waters of neighbouring Pakistan.

But only if Dolphin can skilfully negotiate the political minefield between these two arch enemies who have fought four wars in 50 years and remain forever hostile towards each other. PETROWATCH learns Dolphin officials travelled to Paris last week for preliminary talks with Total, which has two offshore deepwater blocks in the Indus Delta in Pakistan, Block G and H, where it holds 40%, OMV 15%, Petronas 30%, OGDCL 10% and Marigas 5%.

Dolphin is ready: "The rig as a rig is available now, excluding integrated services, and Dolphin is looking at alternative wells to give it some employment prior to ONGC," confirms a source. However, a Total source tells a correspondent for this report that it has no plans to drill a well in either block this year, but possibly early next year.

Whatever emerges, ONGC is relaxed about Bedford Dolphin drilling elsewhere before reaching India. "We have no problem if they drill in Pakistan before coming here," a top ONGC source tells this report.

"As long as they keep to the mobilisation schedule agreed with us we have no issue if they drill in Cuba or Australia or anywhere before coming here." Any Belford Dolphin expedition in Pakistani deep waters could benefit ONGC and enable it to take a final view on its own drilling locations: the Total blocks lie almost adjacent to ONGC's 1,800-metre deep Prospect A located in offshore block GK-DW-1 block where Belford is scheduled to spud its well and are close to Indian block GK-27/1 where in December 2001 ONGC drilled the country's deepest dry well at 6,000 metres with Frontier Drilling rig Frontier Duchess. For Dolphin, the potential of a 45-day, one-well Pakistani job from 1st November to 15th December fits nicely with ONGC's schedule.

The only drawback for Dolphin is that it would lose a $5m mobilisation fee from ONGC, which will pay only $2.5m. Dolphin would also have to juggle the logistics of first taking on Pakistani crew, finish the Pakistani drilling, sail back to a port in the United Arab Emirates, discharge the Pakistani crew, take on Indian crew and sail to India for the ONGC job.

Confusion surrounds the exact date that ONGC has set for Dolphin to spud its first deepwater well. On 11th September Dolphin told ONGC?s western offshore basin manager DK Pande that there would be a slight delay in the procurement of back-up logging tools by its service provider Schlumberger but that Dolphin could nonetheless start exploratory drilling a month in advance in November as the tools could be procured later. ?But ONGC flatly refused,? said a source. ?Pande said ONGC would only spud the first well when Dolphin mobilises all the equipment plus a back-up." Dolphin confirms the development. "We are going through a process of agreeing a start up date with ONGC," reveals a source. "This will relate to delivery of the rig and all integrated services including logging tools. There has been discussion about mobilisation with a partial set of equipment on board i.e. enough equipment to do all the work necessary but missing some back up equipment or using alternative back up equipment for the first couple of weeks." Adds ONGC: ?We don?t want to take any chances in such a cost intensive project." ONGC has already given Dolphin a detailed well prognosis outlining the type of casings, bits, wellheads and well fluids needed to drill the well. ?ONGC has a checklist which is prepared by a spudding committee and contractors must get all items on the list together." ONGC will pay an operating day rate of $191,700 to Belford Dolphin. Once it moves to ?Prospect A? and begins drilling, she'll be paid $856.40 ?per nautical mile?.

Confusion surrounds the exact date that ONGC has set for Dolphin to spud its first deepwater well. On 11th September Dolphin told ONGC?s western offshore basin manager DK Pande that there would be a slight delay in the procurement of back-up logging tools by its service provider Schlumberger but that Dolphin could nonetheless start exploratory drilling a month in advance in November as the tools could be procured later. ?But ONGC flatly refused,? said a source. ?Pande said ONGC would only spud the first well when Dolphin mobilises all the equipment plus a back-up." Dolphin confirms the development. "We are going through a process of agreeing a start up date with ONGC," reveals a source. "This will relate to delivery of the rig and all integrated services including logging tools. There has been discussion about mobilisation with a partial set of equipment on board i.e. enough equipment to do all the work necessary but missing some back up equipment or using alternative back up equipment for the first couple of weeks." Adds ONGC: ?We don?t want to take any chances in such a cost intensive project." ONGC has already given Dolphin a detailed well prognosis outlining the type of casings, bits, wellheads and well fluids needed to drill the well. ?ONGC has a checklist which is prepared by a spudding committee and contractors must get all items on the list together." ONGC will pay an operating day rate of $191,700 to Belford Dolphin. Once it moves to ?Prospect A? and begins drilling, she'll be paid $856.40 ?per nautical mile?.